April 27, 2023

8th Fiscal Period (Ended February 2023)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

This page intentionally left blank.

SANKEI REAL ESTATE Inc.

Table of Contents
 Executive Summary… P3

 1. Financial Results andManagement Highlights… P4

 2. Management Performanceand Management Strategy… P16

 3. Financial Strategy… P26

 4. ESG Initiatives… P30

 Appendix… P33

Disclaimer
This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is notintended for the purpose of soliciting investment in or recommending the
trading of specific products. Please consult your securities company for any
purchase of SANKEI REAL ESTATE investment units. When making any
investment, investors do so at their sole discretion and risk. The
information provided in this document is an analysis or a judgment madeby Sankei Building Asset Management Co., Ltd. (hereinafter, “Sankei
Building Asset Management”) based on information currently available toSankei Building Asset Management, and Sankei Building Asset Management
does not guarantee and is not liable whatsoever for the accuracy, reliability,
integrity, etc. thereof. In addition, the content may be changed orabolished without prior notice. The content of this document contains
earnings forecasts and other forward-looking statements. These forwardlooking statements are not a guarantee of future business performance or
financial content of SANKEI REAL ESTATE. All rights to any part of thisdocument belong to Sankei Building Asset Management, and no part of thisdocument shall be used, cited, reproduced, altered, disassembled,transmitted, etc. by any means, electronic or mechanical, for any purpose
without permission. This document is not a disclosure document based on
the Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

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SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights

 In the 8th FP (ended February 2023), revenue and profit increased compared with the forecast.
 At Shinagawa Seaside TS Tower, renovation to increase property value commenced (scheduled tocomplete in June 2023).
 As the first step of the measures to achieve stable DPU, portfolio rebalancing was implemented(March 2023).
■ S-GATE AKASAKA (20% quasi co-ownership interest) was additionally acquired⇒ Ownership interest is 100 %■SANKEILOGI Settsu was acquired ⇒ The first acquisition of a logistics facility for SANKEI REAL ESTATE Announced support for the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations (March 2023).
Future Growth Strategies

 Until imminent risks are removed, measures to achieve stable DPU will continue.
 To remove imminent risks, revival plans are to be implemented, including cooperation with thesponsor. (Plans are to be announced by the release of the financial report for the 9th FP (October
2023.))* “DPU” refers to distribution per unit. The same applies below.

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SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Results Highlights 8th Fiscal Period (Ended February 2023)
 Operating revenue for the 8th FP: 2,891 million yen (+0.9% from the forecast, -4.5% from the previous fiscal period) Operating income for the 8th FP: 1,243 million yen (+2.3% from the forecast, -23.7% from the previous fiscal period)
 DPU for the 8th FP: 2,305 yen (+66 yen from the forecast, -853 yen from the previous fiscal period)■ Financial Summary for 8th Fiscal Period (Ended February 2023)

Comparison with beginning- Comparison with previous
of-period forecast
fiscal period

Results

2,891 million yen
1,243 million yen
1,076 million yen
2,305 yen

Operating revenue
Operating income

Net income
DPU (distribution per unit)+0.9% +24 million yen+2.3% +28 million yen+3.0% +30 million yen+2.9%+66 yen-4.5% -136 million yen-23.7% -386 million yen-27.0% -398 million yen-27.0%-853 yen■ Change in DPU for 8th Fiscal Period (Ended February 2023)(Unit: yen per unit)

3,000

3,158

2,979

2,500

+6.0%

2,305

2,239
-29.1%

2,000

+2.9%

1,500
1,000
500
0
6th FP Results

7th FP Results

8th FP Forecasts(As of October 2022)

8th FP Results

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SANKEI REAL ESTATE Inc.

Financial Results Highlights Summary of DPU for the 8th FP (Ended February 2023)
 The main reason for the decrease in DPU compared with the previous FP is the removal of temporary factor
at Shinagawa Seaside TS Tower in the previous FP (received termination penalties)■ Summary of DPU for the 8th FP (Ended February 2023)(Unit: yen per unit)

3,158

Rentalrevenue

Termination
penalties of theprevious FP

Settlement of
restoration
work

Restoration
work expenses

Operatingincome (loss)
from otherrent business

Other
operatingexpensesNon-operating
income (loss)

Related to the termination of
Shinagawa Seaside TS Tower
Main breakdown
・Cancellation penalties
・Outsourcing expenses
・Utilities expenses
・Repair expenses
・Depreciation

7th FP Result

+22
-61
-44
+50
+29

8th FP Result
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SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Forecast) 8th Fiscal Period (Ended February 2023)
 Operating revenue (+0.9%) and operating income (+2.3%) both increased from the forecasts(Unit: million yen)
8th FP Forecasts (A)(as of October 2022)

8th FP Results (B)(February 2023)

2,867

2,891

24

2,452

2,452

0

Parking revenue

32

34

1

Utilities reimbursement

119

130

10

Increase in electricity charges invoiced to tenants (+10)

Other revenue

263

274

11

Termination penalties for tenants at SG Nihonbashi (+10)

Operating expenses

Accounting period
Operating revenue
Rental and CAM revenue

Difference(B)-(A)

Major Factors for the Difference

1,652

1,648

(4)

Total expenses related to rent
business

1,342

1,338

(3)

Outsourcing expenses

228

231

2

Utilities expenses

154

214

59

Repair expenses

333

271

(62) Shinagawa (-32), BREEZÉ (-20), Hatchobori (-2)

Property taxes

301

300

(0)

Depreciation

298

296

(2)

Other expenses

25

25

0

Operating income (loss) from rent
business

1,525

1,552

27

Total other operating expenses

310

309

(0)

Asset management fee

245

247

1

Other expenses

64

62

(2)

1,215

1,243

28

Non-operating income

0

1

1

Non-operating expenses

168

168

(0)

Ordinary income

1,046

1,077

30

Net income

1,045

1,076

30

2,239 yen

2,305 yen

66 yen

1,824

1,849

25

Operating income

Distribution per unit (Unit: yen)NOIBREEZÉ (+22), Shinagawa (+11), Hibiya (+5), Omori (+4), Hatchobori (+4)

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SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Previous Fiscal Period) 8th Fiscal Period (Ended February 2023)
 Operating revenue (-4.5%) and operating income (-23.7%) both decreased from the previous fiscal period(Unit: million yen)
7th FP Results (A)(August 2022)

8th FP Results (B)(February 2023)

3,028

2,891

(136)

2,516

2,452

(64) Shinagawa (-29), BREEZÉ (-28) (termination), Omori (-14) (termination), Miyazakidai (+8) (accrual of rent)

Parking revenue

33

34

0

Utilities reimbursement

121

130

9

Other revenue

355

274

Operating expenses

1,397

1,648

250

1,076

1,338

262

Outsourcing expenses

202

231

28

Leasing fees (+23) (Shinagawa (+21), SG Nihonbashi (+1)), Shinagawa BM fees (+3)

Utilities expenses

184

214

29

BREEZÉ (+13), Omori (+6), Hibiya (+4), Toyo (+4), Hatchobori (+3)

Repair expenses

55

271

216

Shinagawa (+240) (restoration work expenses), BREEZÉ (+2), Hatchobori (-6), Toyo (-5), Akasaka (-5)

Property taxes

303

300

(2)

Depreciation

309

296

(13) Shinagawa (-7), Omori (-5)

Other expenses

Accounting period
Operating revenue
Rental and CAM revenue

Total expenses related to rent
business

Difference(B)-(A)

Major Factors for the Difference

Shinagawa (-92) (termination penalties of the previous fiscal period (-346), Settlement of restoration work (+254),(80) SG Nihonbashi (+10) (termination penalties)

20

25

4

Operating income (loss) from rent
business

1,951

1,552

(398)

Total other operating expenses

320

309

(11)

Asset management fee

265

247

(18)

Other expenses

54

62

7

1,630

1,243

(386)

0

1

1

Operating income
Non-operating income
Non-operating expenses

154

168

13

Ordinary income

1,476

1,077

(398)

Net income

1,475

1,076

(398)

3,158 yen

2,305 yen(853 yen)

2,260

1,849

(411)

Distribution per unit (Unit: yen)
NOI

Omori (+6), SG Akasaka (+2), Toyo (+2)

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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)- Portfolio rebalancing was implemented in the 9th FP (March 2023)  As part of the future growth strategies, two properties were acquired (6.6 billion yen) with sponsor support.
 The investment ratio for office buildings, which is slightly overweight, was rebalanced and properties that
contribute to the improvement of portfolio quality and stabilization of portfolio revenues were acquired.

A-10(20% quasi co-ownershipinterest)(additional acquisition)

S-GATE AKASAKA

B-3

SANKEILOGI Settsu
Occupancy
rate
100％

Occupancy
rate
100％

The first property of the S-GATE series, a medium-sized officebuilding designed under the sponsor branding strategy

The first facility in the Kansai region of the SANKEILOGI series oflogistics facilities designed under the sponsor branding strategy

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SANKEI REAL ESTATE Inc.

Management Highlights (Internal Growth)- At Shinagawa Seaside TS Tower, renovation to increase property value commenced A-8[Leasing Brochure]

Shinagawa Seaside TS Tower
 Status of lease agreements

1) March 31, 2022: termination of 7 floors ⇒ December 2022: 2 floors occupied
2) March 31, 2023: termination of 14 floors ⇒ 10 floors delayed vacating (planned for the end of May)
⇒ termination penalties to be received

 Implementation of renovation to increase property value
Implementation of common area renovation to improve office worker comfort (planned completion in June 2023)

 Earned highest CASBEE for Real Estate Assessment certification ranking (Rank S/Five Stars) (April 2023)
Before the renovation

Entrance

After the renovation

Elevator hall (typical floor plate)Toilet (powder room)

Toilet (powder room)

Entrance

April 2023
Earned Rank S
Common area corridor

Kitchenette

Kitchenette

Environmental
certification notacquiredCommon area signage (toilet)

Common area corridor

Common area signage

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SANKEI REAL ESTATE Inc.

Management Highlights (ESG-Related) Announced support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations(March 2023)→ Joined the TCFD Consortium

The TCFD

The TCFD Consortiumis an international initiative established to examine how climate-related
disclosure should be addressed and how financial institutions should be
supported, among other items. The TCFD has publishedrecommendations for companies and others to disclose regarding
climate change-related risks and opportunities in the areas ofGovernance, Strategy, Risk Management, and Metrics and Targets.

was established to discuss how Japanese companies and financial
institutions supporting the TCFD recommendations can promote
effective corporate information disclosure and how to link disclosed
information to appropriate investment decisions by financial
institutions.

 Introduction status of “LUUP,” a share service for electric micromobility
・Toyo Park Building (15)Introduced
・Hatchobori Sankei Building (6)・S-GATE NIHONBASHI-HONCHO (6)To be introduced
・S-GATE AKASAKA (10)[Toyo Park Building]

SANKEI REAL ESTATE promotes introduction of “LUUP” tocontribute to the realization of a carbon-neutral society,while striving to improve convenience for tenants andincrease property value.
* “LUUP” is a service that allows users to share electric kickboards and electric bicycles via smartphone. The same applies below.

[S-GATE NIHONBASHIHONCHO]11SANKEI REAL ESTATE Inc.

MEMO

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SANKEI REAL ESTATE Inc.

Earnings Forecast (Summary) DPU forecast for the 9th FP (ending August 2023): 2,377 yen, +3.1% (+72 yen) from the 8th FP
No change from the forecast published in October last year. Based on the assumption that measures to achieve stable DPU utilizing
unrealized gain of the portfolio is implemented.

 DPU forecast for the 10th FP (ending February 2024): 2,050 yen, -13.8% (-327 yen) from the 9th FP
Though this assumes implementation of DPU stabilization measures by utilizing unrealized gain of the portfolio, note that future
growth strategies (revival plans) have not been fully factored in.
(Unit: yen per unit)
・Increase from property acquisition 262
・Termination at Shinagawa-610
・Other terminations, etc.
-74

Rentalrevenue

RentalrevenueOtherrevenue

Operatingincome(loss) fromother rent
business

・Previous period Shinagawa
settlement-544
・Previous period Nihonbashi
penalties-23
・Damages from Shinagawa
usage
360

8th FPDPU Result

Other
operatingexpenses

Nonoperating
income(loss)

Expected gainon sale of realestate, etc.

・Repair expenses
・Depreciation
・Outsourcing expenses
・Property taxes
・Utilities expenses

Previous
perioddamages from
Shinagawa
usage

Operatingincome(loss) fromother rent
business・Outsourcing expenses
・Repair expenses
・Utilities expenses
・Depreciation

388
-62
-44
-24
-32

Other
operatingexpenses

Nonoperating
income(loss)

Expected gainon sale of realestate, etc.

-65
-45
-22
-23

・Can be changed due to theinvestment management
situation of the entire portfolio,
including the leasing status of
Shinagawa Seaside TS Tower

9th FPDPU Forecast

10th FPDPU Forecast

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SANKEI REAL ESTATE Inc.

Forecast (Unabridged)
 DPU forecast for the 9th FP (ending August 2023): 2,377 yen, +3.1% (+72 yen) from the 8th FP
 DPU forecast for the 10th FP (ending February 2024): 2,050 yen, -13.8% (-327 yen) from the 9th FP(Unit: million yen)Accounting period

8th FP Result (A)(February 2023)

9th FP Forecasts (B)(August 2023)

Operating revenue

2,891

2,849

(42)

2,799

(49)

2,452

2,255

(197)

2,272

17

Parking revenue

34

32

(1)

33

0

Utilities reimbursement

130

121

(9)

125

4

Other revenue

274

177

(97)

9

(168)

・ Utilities revenue (-9) (Shinagawa (-16), Toyo (-3), Miyazakidai (+4), New properties (+2), Hatchobori (+2), Other)

ｰ

263

263

359

96

・ Other revenue (-97) (Damages from Shinagawa usage (+168), Previous FP settlement restoration work (-254),
SG Nihonbashi termination penalties from previous FP (-10)

Rental and CAM revenue

Gain on sale of real estate, etc.
Operating expenses

Difference(B)-(A)

10th FP Forecasts (C)(February 2024)

Difference(C)-(B)

Major Factors for the Difference

・ Rent (-197) New properties (+123) (Settsu, Akasaka 20%)
Existing properties (-319) (Shinagawa (-285), Toyo (-15), Omori (-15), BREEZÉ (-4))

1,648

1,533

(114)

1,624

90

Total expenses related to rent
business

1,338

1,226

(112)

1,303

76

Outsourcing expenses

231

251

20

282

30

・ Outsourcing expenses (+20) (leasing incentive: Shinagawa (+13), BREEZÉ (+5), New properties (+3), Other)

Utilities expenses

214

219

5

234

15

・ Utilities expenses (+5) (Miyazakidai (+4), BREEZÉ (+2), Omori (+2), New properties (+2), Shinagawa (-2), Toyo (-2),
Other)

Repair expenses

271

89

(181)

110

21

・ Repair expenses (-181) (Shinagawa previous period restoration (-240), BREEZÉ (+16), Miyazakidai (+7), Other)

Property taxes

300

312

11

309

(2)

・ Depreciation (+29) (New properties (+22), Shinagawa (+3),BREEZÉ (+2), Hitachi Kyushu (+1))

Depreciation

296

325

29

336

10

Other expenses

Expenses related to rent business (-112 million yen)

10th FP Forecasts (Comparison with 9th FP)

25

26

1

28

1

Operating income (loss) fromrent business

1,552

1,360

(192)

1,137

(222)

Total other operating expenses

309

307

(1)

321

13

Previous period acquired properties full occupancy (+24)

Asset management fee

247

241

(5)

242

0

Existing properties (-7) (Shinagawa (-35), SG Akihabara (-6), BREEZÉ (+28), SG Nihonbashi (+7))

Other expenses
Operating income

62

66

4

79

12

1,243

1,315

71

1,175

(140)

Non-operating income

1

0

(1)

0

0

Non-operating expenses

168

204

36

216

12

1,077

1,111

33

958

(152)

Ordinary income
Net income
Distribution per unit (Unit: yen)
NOI

9th FP Forecasts (Comparison with 8th FP)
Operating revenue (-42 million yen)

1,076

1,110

33

957

(152)

2,305 yen

2,377 yen

72 yen2,050 yen(327 yen)

1,849

1,685

(163)

1,474

(211)

Operating revenue (-49 million yen)・ Rental revenue (+17)

・ Utilities revenue (+4) (Hibiya (+2), Toyo (+2))
・ Other revenue (-168) (Previous period damages from Shinagawa usage)

Expenses related to rent business (+76 million yen)・ Outsourcing expenses (+30) (leasing incentive: Shinagawa (+26), Toyo (+5), Other)・ Utilities expenses (+15) (Increase due to end of electricity rate reduction and new tenant occupancy)(Shinagawa (+4), Toyo (+2), SG Nihonbashi (+2), Hibiya (+1), Other)・ Repair expenses (+21) (BREEZÉ (+20), Omori (+5), Hibiya (+4), Other (+7), Shinagawa (-8), Miyazakidai (-7))
・ Depreciation (+10) (Shinagawa (+3),BREEZÉ (+3), Omori (+2), Other)

14

SANKEI REAL ESTATE Inc.

MEMO

15

SANKEI REAL ESTATE Inc.

2. Management Performance and Management Strategy

16

SANKEI REAL ESTATE Inc.

External Growth Results - Portfolio rebalancing was implemented in the 9th FP (March 2023)  Acquired two newer, fully occupied properties to rebalance the slightly overweight investment ratio in officebuildings and to attain portfolio diversification benefits■ Acquired Assets*
Property name

■ Change in Portfolio after Two Properties Were Acquired*

SANKEILOGI Settsu

S-GATE AKASAKA

Before acquisition

Acquisition asset

After acquisition(Acquisition price)

96.6 billion yen

6.6 billion yen

103.2 billion yen

Number of properties

14 properties

2 properties

Acquisition price perproperty

6.9 billion yen

Average appraisal NOI yield(acquisition price basis)(20% quasi co-ownership interest)
Asset size

Property photo

15 properties(including additionally acquired
two properties)

5.5 billion yen

6.8 billion yen

4.2%

3.8%

4.1%

Average building age

19.7 years

2.0 years

18.6 years

1,498 million yen

Occupancy rate

93.4%

100.0%

94.2%

4.0%

3.4%

Office buildings rate(acquisition price basis)

86.6%

21.1%

82.4%

Construction
completion

October 2022

July 2015

Sponsor support rate(acquisition price basis)100.0%

100.0%

100.0%

Occupancy rate

100.0%

100.0%

LTV ratio

47.4%

100.0%

50.6%

Sponsor support
Sub assets

Sponsor support
Office buildings

Location

Settsu-shi, Osaka

Minato-ku, Tokyo

Acquisition price

5,242 million yen

1,400 million yen

Appraisal value atacquisition

5,440 million yen

Appraisal NOI yield(acquisition price basis)(as of March 31, 2023)(additional acquisition calculated
as 0.2 properties)* The figures for “Acquired assets” show the figures published as of the time of acquisition, and the figures for “Change in the portfolio after the two properties were acquired” show the figures asof the end of the 8th FP for “Before acquisition,” the figures published as of the time of acquisition for “Acquired assets” and the total of the “Before acquisition” and “Acquired asset” figures for“After acquisition.” The same applies below.

17

SANKEI REAL ESTATE Inc.

External Growth Results - Overview of two newly acquired properties B-3

quasi co-ownership interest)
S-GATE AKASAKA (20%(additional acquisition)

SANKEILOGI Settsu

A-10

First property in the Kansai region of the SANKEILOGI series oflogistics facilities

 100% ownership interest after additional acquisition

At a 6-minute walk to/from Settsu Stationon the Osaka Monorail, the property enjoys
great public transportation access to thecenter of Osaka and Kyoto/Kobe. The
superb location allows it to be a hub forlogistics between major cities with great
access to highways.

1.

1.

Functionality
・ Effective height under the beam 5.5 meters, Floor load
1.5 t/m2
・ Max. load for freight elevator 3.5 tons (one unit),
vertical conveyors 1.5 tons (three units)
・ Each floor is equipped with a charging station forforklifts
・ Capacity of 15 truck berths (for large-sized vehicles) /waiting area for 7 trucks
・ Three dock levelers installed
2. Environmental awareness・ Equipped with a rooftop solar power system, it enables
captive consumption within the facility and operates
autonomously using solar power in the event of a power
outage.
・ Application of LED lights
・ Application of sandwich panels, which is effective forthermal insulation.
・ Space secured for emergency power generation systems
3. Workability
・ The entrance hall has a woody interior to welcome
visitors with warmness.
・ Men’s and women’s restrooms on each floor.
・ Outfitted with restrooms and break rooms for drivers.

■ MAP

2.

3.

■ Acquired “2020 3 star”
DBJ Green Building Certification

The property is a 1-minute walkfrom Akasaka Station on the Tokyo
Metro Chiyoda Line and also enjoys
access to Tameike-sanno Station,
Akasaka-mitsuke Station, andNagatacho Station. Six lines acrossthe four stations are available foruse.
In the surrounding Akasaka area,large-scale development plans arein progress.
A high-spec building equipped with
BCP measures and earthquakeresistant structures with anearthquake resistance level
equivalent to 1.25 times that underthe Building Standards Act.

■ Basic specs
Typical floor plate Approx. 350 tsubos
Ceiling height

2,800 mm

Air conditioning

Individual air conditioning

Raised floor

100 mmFloor load

500 kg/m2 ～ 800 kg/m2■ MAP

SANKEILOGI Settsu

S-GATE AKASAKA18

SANKEI REAL ESTATE Inc.

External Growth Strategy - Implement diversified investment conscious of the portfolio matrix Strong sponsor
supportDiversified investment bymaking maximum use ofstrong sourcing ability

Core investment centeredon developed properties■ Cap Rate (Appraisal NOI Yield) x Area × Acquisition Price
Low

Central 3 wards of Tokyo
0(Chiyoda, Chuo, and Minato
1 wards)

2.5%

3.0%

Cap. Rate

3.5%

4.0%

4.5%

Area

Tokyo 23 wards(other than central 3 wards of2
Tokyo)

Actual NOI yield*

GreaterTokyo(other3
than Tokyo
23 wards)

Other ordinancedesignated cities
Core cities, major
regional cities 5
Major Regional Cities

Osaka City
Nagoya4City

Tokyo Sankei Building

S-GATE AKASAKA
Typical floor plate
158 tsubos
7 years old
1-minute walk

Typical floor plate
536 tsubos
22 years old
1-minute walkHibiya Sankei Building
Typical floorplate
105 tsubos
30 years old
1-minute walk

S-GATE NIHONBASHIHONCHO
Hotel Intergate
Typical floorplateTokyo Kyobashi
186 tsubos
5 years old
4 years old
1-minute walk
4-minute walk
S-GATE AKIHABARA
Typical floorplate 74 tsubos
5 years old 5-minute walk

5.0%

5.5%

Makes portfolio’s
profitability and stability
compatible

Office buildings
Shinagawa Seaside TS Tower
Typical floorplate 446 tsubos
19 years old
1-minute walkMiyazakidai
Garden Office
Typical floorplate 350 tsubos
30 years old
3-minute walk

■ Investment Ratio byGeographic Area
Hiroshima City
3.9%

* Red indicates acquired assets
The size of bubble represents
the acquisition priceToyo Park Building
Typical floorplate
219 tsubos
31 years old
9-minute walk
Omori Park Building
Typical floorplate342 tsubos
29 years old
3-minute walk

Sub assets

3.8%

Fukuoka
City

9.7%
Osaka
City
12.7%

SANKEILOGI SettsuNew
6-minute walk

Kawasaki City
2.7%
Hitachi Kyusyu Building
Typical floorplate 322 tsubos
26 years old
17-minute walk

BREEZÉ TOWER
Typical floorplate
406 tsubos
14 years old
3-minute walk

Hatchobori Sankei Building
Typical floorplate 201 tsubos
57 years old
3-minute walk

Other 5.1%

Greater
Tokyo
68.7%

Tokyo 23 wards
66.0%■ Investment Ratio by
Asset TypeSub assets
17.6%

Hotel Intergate
Hiroshima
4 years old
3-minute walk
Office buildings
82.4%

High

6.0%
* “Actual NOI yield” refers to the actual NOI yield calculated assuming the level of normal operations, after adjusting temporary factors
such as fixed asset taxes that were not expensed at the time of acquisition and one-off termination penalties.

19

SANKEI REAL ESTATE Inc.

Pipeline from Sponsor■ Main Development Topics (summary)
Office buildings

Complex

S-LINKS Shibuya

Daihaku Sky Square(S-LINKS)

Overview
Location

Overview
Location

Meguro-ku, Tokyo

Completion November 2022

Hakata-ku,
Fukuoka-shi

Total floorarea

9,889.78 m²
Reinforced concrete
construction
1 floor below groundand 18 floors above
groundCompletion February 2023

<Features>
1. S-LINKS Shibuya, a prominent
complex of residences, work places,
clinics and shops areas located in anarea at the forefront of informationand culture.
2. Seamless “connection” achieved
through the connected platform“homehub,” introduced by Sankei
Building for the first time.
3. Enriched lineup of shared facilities
that includes a fitness gym, rooftop
terrace, laundry room, EV charging
stations, EV car-sharing service,micromobility-sharing service, etc.

Total floorarea

4,992 m²

Structure/size

Structure/
size

Steel construction,
10 floors above
groundS-LINKS Shibuya official website
https://www.sankeibldg.co.jp/s-linksshibuya/

Logistics facilities*Joint project

Construction
completion

Building structure/
Property nameLocation
number of floors
Kashiwanoha, Kashiwa-shi,
Steel Construction,
March 2022
SANKEILOGI Kashiwanoha
Chiba
4 floors above ground
Onna, Atsugi-shi,
Steel Construction,
August 2022
SANKEILOGI Atsugi
Kanagawa
4 floors above ground
Yatabe Logistics Project
Yatabe, Tsukuba-shi,
Steel Construction,
March 2023
Ibaraki
2 floors above ground(tentative name)Adachi Iriya Project
Iriya, Adachi-ku,
Steel Construction,
May 2023(planned)Tokyo
5 floors above ground(tentative name)Minamisuita Logistics Project Minamisuita, Suita-shi,
December 2023 Steel Construction,(planned)Osaka
5 floors above ground(tentative name)*kotaritenyaku,
Reinforced concrete
Nagaokakyo-shi Logistics
April 2024
Nagaokakyo-shi,steel-frame,(planned)
Project (tentative name)*
Kyoto
4 floors above groundKomaki-kita Logistics Project Fuso-cho, Niwa-gun,
Steel Construction,
April 2024
(planned)Aichi
2 floors above ground(tentative name)*
Fuchu Logistics ProjectMusashidai, Fuchu-shi,
Steel Construction,
Winter 2024
(planned)Tokyo
4 floors above ground(tentative name)*

Office buildings

Residential

LEFOND PROGRES, etc.
Development plans for LEFOND
can be found below.

S-GATE, S-GATE FIT
official website

LEFOND
official website

https://www.s-gate-office.com/

https://www.lefond.jp/* The properties shown on this page are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of preparation of this material,
and there is no assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in the future.

20

SANKEI REAL ESTATE Inc.

Internal Growth Results■ Change in Rent Gap for Office Buildings■ Change in Occupancy Rate

0.8%
100.0%

100.0%

100.0%

99.9%

100.0%

98.2%

0%

99.1%
94.2%

93.4%

-4.4%
-10%

90.0%

-2.9%

-2.6%

-8.5%
-12.0%～
80.0% ～

-14.4%
August2019

February
2020

August February
2020
2021

August February August February
2022
2021
2023
2022

-15.9%-20%
September March September March September March September March
2019
2020
2020
2021
2021
2022
2022
2023
After the COVID-19 pandemic (March 2020)

After the COVID-19 pandemic (March 2020)■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
Actual NOI yield (left axis)
Bar graph: Average unit price for officebuilding rent (right axis)

4.3%

4.5%

4.0%

4.4%

4.5%

19,309 yen

19,965 yen

4.2%

4.0%

4.0%

4.3%

20,0003.8%

19,00018,486 yen

3.5%

17,992 yen

18,00017,523 yen

3.0%

17,022 yen

17,131 yen

2.5%

16,771 yen

17,00016,000

New acquisitionof 4 properties
September 2021

2.0%
1.5%

(yen)
21,000～～～15,00014,0000

1.0%
August 2019

February 2020

August 2020

February 2021

August 2021

February 2022

August 2022

February 2023

After the COVID-19 pandemic (March 2020)

21

SANKEI REAL ESTATE Inc.

Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Contracts Signed) –Continue negotiations that focus on reducing the risk of tenants’ leaving with considerations on the current
office rental market■ Rent Revision Performance of Office Buildings (Based on Rental Area)
Percentages of rent revision results (bar graph)
100%
75%
50%

27.1%

74.9%
Increase

25.1%
No change
0%35.1%
Increase

12.7%

68.5%
Increase

10.2%

98.3%
Increase

7.0%

73.0%
No change

31.4%
No change
0.1%

0.1%
Increase

25.8%
Increase

18.5%

25%

Number oftargeted tenants
Targeted leasedarea

Rate of rent increase (line graph)
65.8%
Increase

81.3%
No change

5.2%

57.3%
No change

0.0%
34.1%
No change

Decrease

1.7%
No change

1.2%

Decrease

7.6%
Decrease

0.1%

18.7%
Decrease

Decrease

30%

96.2%
No change

20%

6.1%

10%

Rate ofincrease0%

Decrease
3.7%

FP endedAugust 2019

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

FP endedFebruary 2022

FP endedAugust 2022

FPendedended
FP
February2023
2023
February

9 cases

24 cases

30 cases

27 cases

13 cases

11 cases

17 cases

24 cases

369 tsubos

3,144 tsubos

4,165 tsubos

2,769 tsubos

1,195 tsubos

1,725 tsubos

705 tsubos

2,600 tsubos-10%

After the COVID-19 pandemic (March 2020)■ Rent Revision Performance of Office Buildings (Based on Number of Cases)

By Contract Form

OverallFixed-term

Increase
1 case4.2%

Decrease
5 cases

Increase
1 case7.7%

20.8%
Decrease
5 cases

24 cases
75.0%

No change
18 cases

53.8%

No change
7 cases

RetailOfficeOrdinary
No change
11 cases

38.5%

13 cases

By UseIncrease
Decrease
4 cases
4.3% 1 case
17.4%

11 cases

23 cases

100%

78.3%

Decrease
1 case1 caseNo change
18 cases100%

22

SANKEI REAL ESTATE Inc.

Internal Growth Results■ Examples of Lease-Up
A-2

BREEZÉ TOWER

A-3S-GATE NIHONBASHI-HONCHO

Three tenants newly signed(FP ended February 2023)+
Immediately responded to small-grouped
tenants by dividing a floor into four
sections.
Application from three new tenants+
One tenant newly signed

Although mid-term terminations
occurred, tight-knit relations enabled
us to respond to needs for floor spacewithin the building.
↓
Full occupancy maintained(No downtime)(March 2023)

Occupancy rate 90.4% → 96.9%(forecast for FP ending August 2023)■ Rent Revision Examples
A-1

Tokyo Sankei Building

Revision with increase: 1 caseApprox. 121 tsubos(owned by SANKEI REAL ESTATE approx. 2.4 tsubos)+6.1% compared with before■ For increases of utilities expenses including electricity
and water
Utilities expenses are to increase more than expected due to not
only the steep rise in prices of energy resources but also the rapid
rise in the value of the dollar last autumn.
① Electricity charges will be reflected in the invoices to tenants,
basically, while the buildings with individual air-conditioning
systems (S-GATE series) will absorb most of the increases.
Therefore utilities expenses are within our expectations.
② Utilities expenses greatly exceeded budgets for some buildings
with central air-conditioning systems (BREEZÉ, Hatchobori andOmori) due to soaring gas prices and for some buildings using
local air-conditioning systems (Hibiya) where running costs
significantly exceeded expectations.

23

SANKEI REAL ESTATE Inc.

Internal Growth Strategy– Aiming to achieve stable medium- to long-term operations –■ Scheduled Renewal with Rent Revision/Renewal and Progress(Targeting Office Buildings)
Contract revision/renewal planned area is as of the end of the 8th FP (not including two acquired properties)
Renewal with rent revision/renewal is based on contracts signed (applicable to tenant contracts signed as ofthe end of March 2023)
2023年8月期

2024年2月期

Ending February 2024
（第10期）(10thFP)
0 tsubos

10,533 tsubos(43.5%)

9,160 tsubos
Progress rate 87.0%

Ending August 2023
（第9期）
(9th FP)1,255 tsubos(5.2%)
2,000 tsubos

4,000 tsubos

6,000 tsubos

8,000 tsubos 10,000 tsubos 12,000 tsubos

Contract revision/renewal area
契約更改・更新済面積
契約更改・更新予定面積（総賃貸面積に占める割合）
Contract revision/renewal planned area (ratio to total leased area)
A-8

Shinagawa Seaside TS Tower■ Leasing Policy (continued from the previous term)■ Assumed Occupancy Rate of Portfolio

9th FP (ending August 2023)
・End of period 88.9%
・Period average 88.1%
10th FP (ending February 2024)
・End of period 95.3%
・Period average 92.2%■ Implementation of Strategic Leasing Despite the policy to reduce the risk of tenants moving,negotiations will be made for rent increase with tenants witha rent gap (especially for tenants under fixed-term leases) Diversify leasing periods, advance cancellation notices, switch
the form of contracts (from ordinary leases to fixed leases)
and diversify tenants

1. Expansion of target companies (area and tenant attributes)- Identify the companies in the neighboring areas and approach them
2. Optimize and accelerate leasing activities- Capture the needs of target companies (cost reduction, better location, etc.) and accordingly provide recommendations- Send direct messages to target companies and conduct telemarketing
3. Full deployment of salesforce for leasing- Utilize resources and network not only from PM company and leasing agencies but also lessor-side resources and network(AM companies/sponsor building sales team)
4. Continuous approach to leasing agencies- Prepare open rooms for prospective tenants and viewing for leasing agencies (viewing for renovations to increase property
value)
5. Rouse interest in value-up renovations, capture candidate companies

24

SANKEI REAL ESTATE Inc.

MEMO

25

SANKEI REAL ESTATE Inc.

3. Financial Strategy

26

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (1) –With the acquisition of two new properties, the LTV ratio will increase temporarily. However, under a medium-term view, it will
cruise around the level of normal operation (45-50%)
Depending on the trends of interest rates, some loans will be implemented with floating interest rates, but no change will beseen in the policy to improve and stabilize the financial base

 Financial Highlights (as of March 30, 2023)

 LTV Ratio During Normal Operations

Balance of interestbearing liabilities

57.0 billion yen

LTV ratio

50.6%

Ratio of long-term
debt

71.9%

Ratio of fixed-rate
debt

88.1%

Average financing
interest rate

0.49%

Average remaining
time to maturity

2.5 years

LTV ratio

47.4%

End of the 9th FP
50.6%

End of the 10th FP
50.3%(Forecast)(Forecast) Lender Composition (as of March 30, 2023)[Unit: million yen]

■ Distribution Map of Average Financing Interest Rates and Average

BorrowingamountPercentage

Mizuho Bank

19,30033.9%

Sumitomo Mitsui Banking

9,100

16.0%

1.0

Development Bank of Japan

7,700

13.5%

0.9

Mizuho Trust & Banking

4,640

8.1%

0.8

Sumitomo Mitsui Trust Bank

4,500

7.9%

0.7

SBI Shinsei Bank, Limited

4,080

7.2%

0.6

Resona Bank

3,780

6.6%

0.5

Aozora Bank

2,000

3.5%

The Nishi-Nippon City Bank

1,000

1.8%

600

1.1%

300
57,0000.5%
100.0%

Remaining Time to Maturity of Office J-REITs(%)

Average financing interest rate

End of the 8th FP(as of March 30, 2023)

SANKEI REALESTATE

0.4
0.3

Kansai Mirai Bank

0.2

Chiba Bank
2

3

4

5

6

7

11 banks in total

Average remaining time to maturity (year)

27

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (2) – Will implement loans based on funding uses and the future of SANKEI REAL ESTATE while monitoring
interest rate trends, etc.
1) Refinancing 9th FP → 18th FP (period of 4.5 years) (March 2023)
2) New loans for two properties acquired Floating interest rate for 1 year (March 2023)
 Promote the distribution and prolongation of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of March 30, 2023)
 Refinancing results for the 8th FP
5.9 billion yen at a fixed interest rate, 4.5 years(to be repaid in the 17th FP)

1) Refinanced borrowings due in the 9th FP (March 13, 2023)
3.7 billion yen at a fixed interest rate, 4.5 years (to be repaid in the 18th FP)(Unit: million yen)

10,0002) New loans for two properties acquired(March 30, 2023)
7,500
6,800

6.8 billion yen at a floating interest rate, 1 year

5,000

2,500

5,900

6,200

5,900
4,300

3,700

4,800

6,200

5,900

4,300

5,600
3,700

3,300

0
8th FP

9th FP

10th FP

11th FP

12th FP

13th FPLong-term borrowings

14th FP

15th FP

16th FP

Short-term borrowing

17th FP

18th FP

19th FP28

SANKEI REAL ESTATE Inc.

MEMO

29

SANKEI REAL ESTATE Inc.

4. ESG Initiatives

30

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)■ Topics

 Announced support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations(March 2023).
→ Joined the TCFD Consortium Establishment of policies for climate change and resilience (March 2023)
Stipulate policies on responses to climate change-related risks and opportunities, business activities forclimate-related issues, and resilience of strategies (strength/ability to recover) Shinagawa Seaside TS Tower acquired Rank S (five stars), the highest in the CASBEE forReal Estate Assessment certification, which is an environmental certification (April 2023)
 Introduction of “LUUP,” a share service for electric micromobility(total of 4 properties)
 Continued installation of LED lighting at tenant turnover・8th FP (ended February 2023): Installed at BREEZÉ TOWER
・9th FP (ending August 2023): Installation at Toyo Park Building planned■ Future Initiatives
 SANKEI REAL ESTATE will renew its website (planned for June 2023)
 Promoting acquisition of environmental certification for owned assets (BELS, DBJ Green Building, CASBEE, etc.)
 Considering installation of EV charging stations at owned assets
31

SANKEI REAL ESTATE Inc.

ESG Initiatives (2)■ Various Rules Associated with ESG
Sustainability Policy

Sustainability Promotion System••(1) Preserving the Earth environment and reducing theenvironmental load of assets under management(2) Serving the local community(3) Cooperating with external stakeholders(4) Working with executives and employees(5) Observing compliance and establishing/maintaining aninternal control system(6) Disclosing ESG information and securing transparency••

Sustainability Promotion System
•
Rules
•
Policy on energy conservation
Policy on greenhouse gas emissions •reduction
Policy on sustainable procurement•••

Policy on saving water
EMS operational
manualPolicies for climatechange and resilience■ Social
 Relationship with Stakeholders
 Response to the COVID-19 Pandemic■ Environment
Energy consumption reduction targets

 Long-term target 1: Reduce annual energy consumption intensity within the scope
managed by the owner by 5% from the base year (2019) by 2025
 Long-term target 2: Reduce annual energy consumption intensity within the scope
managed by tenants by 1% from the base year (2019) by 2025

GHG emission reduction targets<Scope 1 + Scope 2>
 The single-year target is to reduce energy consumption intensity by 1% comparedwith the previous year for Scope 1 + Scope 2
 Reduce by 5% from the base year (2019) in the medium
to long term (5 years)

Year ofissuance

Tokyo Sankei Building

★★★★

2021

BREEZÉ TOWER

★★★★

2021

S-GATE NIHONBASHI-HONCHO

★★★★

2022

S-GATE AKIHABARA

★★★

2022

S-GATE AKASAKA

★★★

2020

Hotel Intergate Tokyo Kyobashi

★★★★

2021

Hotel Intergate Hiroshima

★★

2021

Shinagawa Seaside TS Tower

★★★★★

2023

■ Governance The Asset Management Company introduced a fiduciary duty policy(policy for Customer-Oriented Business Conduct) (March 2023)
 Considering intensifying same-boat investment
Number of units
held by sponsor

467,099 unit

Status of environmental certificates
Evaluation
ranking【Examples of building events】
Christmas Illumination 2022
Sustainable Christmas decorations withrecycled seed-paperat Tokyo Sankei Building

Number of investment units
issued and outstanding<Scope 3>
 Reduce by 1% from the base year (2019) in the medium
to long term (5 years)

Property nameInternal regulations, policies, etc.

Chief Sustainability Officer: Executive Deputy President
Sustainability Officer: General Manager, Sustainability
Promotion OfficeSustainability promotion meetings: Examining and planningvarious policies, targets, and measures related to sustainability

FP ended February 2023
Percentage of units
held by sponsor

17,479 unit

3.74%

■ Contributions to SDGs (Sustainable Development Goals)
Acquired DBJ Green
Building Certification

Acquired BELS
evaluation

CASBEE application
underway

SANKEI REAL ESTATE’s efforts have contributed to the following SDGs.
Goal 3: Ensuring prevention of the spread of infectious
diseases, flexible work styles
Goal 7: LEDs, solar power, reduction of heat load
Goal 8: Rooftop terraces (worker-friendly buildings)
Goal 11: Green Building certification, seismic dampers,
stockpiles
Goal 12: Appropriate treatment and recycling of industrial
waste
Goal 13: Disaster countermeasures, intake of people having
difficulty returning home32

SANKEI REAL ESTATE Inc.

Appendix

33

SANKEI REAL ESTATE Inc.

Balance Sheet (Unabridged) for the Fiscal Period Ended February 2023 (8th FP)(Unit: thousand yen)
7th FP
8th FP(as of Aug. 31, 2022) (as of Feb. 28, 2023)

7th FP
8th FP(as of Aug. 31, 2022) (as of Feb. 28, 2023)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance costs
Total deferred assets
Total assets

5,575,535
3,303,184
62,70271,80178
9,013,302

5,208,842
3,097,656
64,47862,7958,433,772

181,978(22,182)
159,795
544
(53)
490
2,457,766
18,769,170(1,592,660)
17,176,510
71,171(3,517)67,654
11,302

182,520(25,525)
156,995
544
(67)
476
2,457,766
18,955,810(1,879,113)
17,076,697
71,171(4,558)66,613
14,330(1,698)(2,290)9,603
49,525(11,769)
37,756
77,433,848
56,722
97,400,148

12,04071,817(16,419)
55,397
77,433,848
945
97,260,780

2,953
2,953

2,013
2,013

103,157
15
10,000113,173
97,516,274

103,557
12
10,000113,569
97,376,363

24,09924,099106,553,676

18,075
18,075
105,828,211

Liabilities
Current liabilities
Operating accounts payable
Long-term loans due within one year
Accounts payable - otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans
Lease and guarantee deposits received
Lease and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

244,965
9,600,000
308,770
44,831
926
171,838
447,828
6,036
10,825,198

347,1039,600,000
288,400
50,743855
38,660449,764
676
10,776,204

40,600,000
88,2374,129,413
44,817,651
55,642,849

40,600,000
88,166
3,851,485
44,539,651
55,315,856

49,442,685(7,136)49,435,549

49,442,685(7,136)49,435,549

1,475,277

1,076,805

1,475,277
50,910,827
50,910,827
106,553,676

1,076,805
50,512,354
50,512,354
105,828,211

34

SANKEI REAL ESTATE Inc.

Statement of Income and Retained Earnings (Unabridged)
for the Fiscal Period Ended February 2023 (8th FP)(Unit: thousand yen)
7th FP

8th FP(as of Aug. 31, 2022)(as of Feb. 28, 2023)

2,516,558

2,452,313

Operating revenue
Rent business revenue
Other rent business revenue

511,493439,634

3,028,051

2,891,948

1,076,927

1,338,956

265,992

247,055

Asset custody fee

2,100

2,092

Administrative service fees

7,460

8,020

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

41,722

48,325

Total operating expenses

1,397,803

1,648,050

Operating income

1,630,247

1,243,897

Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee

Non-operating income

Interest income

41

41

Reversal of distributions payable

-

584

-

930

Insurance claim income
Interest on refund

279-

Other non-operating income

0285

Total non-operating income

321

1,842

Interest expenses

100,931

114,796

Borrowing related expenses

47,46047,427

Amortization of investment unit issuance expenses

6,024

6,024

Non-operating expenses

Other non-operating expenses

26-

Total non-operating expenses

154,444

168,248

Ordinary income

1,476,124

1,077,491

Net income before income taxes

1,476,124

1,077,491

Income taxes - current

932

861

Income taxes - deferred

(5)

3

927

865

1,475,197

1,076,626

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

80

178

1,475,277

1,076,805

35

SANKEI REAL ESTATE Inc.

Statement of Cash Flows for the Fiscal Period Ended February 2023 (8th FP)(Unit: thousand yen)

Cash flows from operating activities
Net income before income taxes
Depreciation
Amortization of investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from lease and guarantee deposits received
Refund of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received in trust
Refund of lease and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of short-term loans
Proceeds from long-term loans
Repayments of long-term loans
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

7th FP

8th FP(as of Aug. 31, 2022)(as of Feb. 28, 2023)

1,476,124
310,7636,024(41)
100,931
27,164
389,377(10,343)
116,727
64,742
171,838(37,563)(5,319)(9,818)(78)
2,600,531
41(94,905)(821)
2,504,846

1,077,491
297,033
6,024(41)
114,796(1,775)
9,006
77,214(22,151)(133,178)
1,936(5,360)(399)
78
1,420,674
41(108,884)(932)
1,310,899(2,708)(102,914)
595(331)
110,219(83,190)(78,330)(542)(130,867)
632(703)
74,547(351,923)(408,856)(400,000)
5,600,000(5,600,000)(1,390,093)(1,790,093)
636,421
8,242,298
8,878,719

5,900,000(5,900,000)(1,474,263)(1,474,263)(572,220)8,878,719
8,306,499

36

SANKEI REAL ESTATE Inc.

Status of Lenders (as of March 31, 2023)
Category

LenderShort-term
Mizuho Bank
loans

Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust BankSBI Shinsei Bank, Limited
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust BankSBI Shinsei Bank, Limited
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Long-term Sumitomo Mitsui Trust Bankloans
SBI Shinsei Bank, Limited
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust BankSBI Shinsei Bank, Limited
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust BankSBI Shinsei Bank, Limited
Resona Bank
The Nishi-Nippon City Bank
Kansai Mirai Bank
Chiba Bank

Loan amount(million yen)

6,800

856
639
548
350
319
294
294
950
800
2,000
620
550
490
490
1,167
832
713
456
416
358
358
1,331
929
796
509
465
385
385
1,550
1,000
700
600
500
500
400
500
300
150

6,800

3,300

5,900

4,300

4,800

6,200

Interest rate

0.41273%(floating)

0.49096%(fixed)0.36200%(fixed)0.32923%(fixed)0.36978%(fixed)0.29655%(fixed)Borrowing date(upper row)
Maturity date(lower row)

Repayment
methodDescription

Mar. 30, 2023
Mar. 30, 2024

Mar. 12, 2019
Mar. 12, 2024

Sep. 3, 2019
Sep. 3, 2023

Mar. 12, 2020
Sep. 12, 2024

Mar. 12, 2021
Mar. 12, 2025

Sep. 2, 2021
Sep. 2, 2025

Lump-sum
repayment atmaturity

Unsecured/
Nonguaranteed

Category

LenderLoan amount(million yen)Mizuho Bank

750

Sumitomo Mitsui Banking

700

Development Bank of Japan

700

Mizuho Trust & Banking

200

Sumitomo Mitsui Trust Bank500

SBI Shinsei Bank, Limited

500

Resona Bank

400

Aozora Bank

1,500

The Nishi-Nippon City Bank

500

Kansai Mirai Bank

300

Chiba Bank

150

Mizuho Bank

1,100

Sumitomo Mitsui Banking

900

Development Bank of Japan

700

Mizuho Trust & Banking

300

Sumitomo Mitsui Trust Bank300

SBI Shinsei Bank, Limited

300

Resona Bank

200

Aozora Bank
Long-term
Mizuho Bank
loans
Sumitomo Mitsui Banking

1,574

4,300

Borrowing date(upper row)
Maturity date(lower row)

0.35542%

Sep. 2, 2021

(fixed)Sep. 2, 2026

0.38044%

Oct. 1, 2021

(fixed)Apr. 1, 2026

500
1,084

Development Bank of Japan

929

Mizuho Trust & Banking

593

Sumitomo Mitsui Trust Bank

542

SBI Shinsei Bank, Limited

439

Resona Bank

439

Mizuho Bank

2,250

Sumitomo Mitsui Banking

1,500

Mizuho Trust & Banking

620

Sumitomo Mitsui Trust Bank

550

SBI Shinsei Bank, Limited

490

Resona Bank

490

Mizuho Bank

972

Sumitomo Mitsui Banking

716

Development Bank of Japan

614

Mizuho Trust & Banking

392

Sumitomo Mitsui Trust Bank

358

SBI Shinsei Bank, Limited

324

Resona Bank

6,200

Interest rate

5,600

5,900

3,700

0.77500%

Mar. 14, 2022

(fixed)Mar. 14, 2028

0.79285%

Sep. 5, 2022

(fixed)Mar. 5, 2027

1.02763%

Mar. 13, 2023

(fixed)Sep. 13, 2027

Repayment
methodDescription

Lump-sum
repayment atmaturity

Unsecured/
Nonguaranteed

324
Total

57,000* If the maturity date is not a business day, it will be the following business day, and if thatbusiness day is the following month, it will be the immediately preceding business day.

37

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs) for the Fiscal Period Ended February 2023 (8th FP)
7th FP

8th FP

7th FP(as of Aug. 31, 2022) (as of Feb. 28, 2023)

8th FP(as of Aug. 31, 2022) (as of Feb. 28, 2023)

3,158 yen

2,305 yen

Distribution yield

6.5%

5.3%

3.8%

ROE

5.8%

4.3%

4.3%

3.5%

Net assets per unit

108,993 yen

108,140 yen(against book value)

4.0%

3.2%

NAV per unit

125,250 yen

123,067 yen(against appraisal value)

3.7%

3.0%

Investment unit price (at end of period)

97,200 yen

86,400 yen(NOI yield)

5.0%

4.3%

NAV multiple

0.8x

0.7x

(NOI yield after depreciation)

4.3%

3.6%

PBR

0.9x

0.8x

FFO

1,785 million yen 1,372 million yen

PER

15.4x

18.8x

AFFO

1,701 million yen 1,160 million yen

FFO multiple

12.7x

14.7x

(FFO)

82.6%

78.4%

(AFFO)

86.7%

92.8%

LTV ratio(against total assets)

47.1%

47.4%

Distribution per unit

(against total assets<considering unrealized
gain/loss>)

44.0%

44.5%

(against book value)

4.6%(against appraisal value)

NOI yield

NOI yield after depreciation

Implied cap rate

FFO per unit

3,821 yen

2,938 yen
Payout ratio

EPS
*1.
*2.
*3.
*4.

*5.
*6.
*7.
*8.

3,158 yen

2,304 yen

LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total
assets (book value) + unrealized gain/loss)
NOI yield (against book value) = (Operating income from real estate rent business + depreciation) /Book value of real estate for lease NOI yield (against appraisal value) = (Operating income from realestate rent business + depreciation) / Appraisal value of real estate for lease
NOI yield after depreciation (against book value) = Operating income from real estate rent business /Book value of real estate for lease NOI yield after depreciation (against appraisal value) = Operating
income from real estate rent business / Appraisal value of real estate for lease
Implied cap rate (NOI yield) = NOI (Annualized; current FP result x 2) / (Total fair value +Interestbearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized; current FP resultx 2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)
FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)
AFFO = FFO – Capital expenditure
FFO per unit = FFO / Total number of investment units issued and outstanding at end of period
EPS = Net profit / Total number of investment units issued and outstanding at end of period*9.

Distribution per unit = Total distribution / Total number of investment units issued and outstandingat end of period*10. Distribution yield = Distribution per unit (Annualized; current FP result x 2) / Investment unit price(at end of period)*11. ROE (Return on equity) = Net profit (Annualized; most recent FP result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units issued andoutstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets per unit
*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized; most recent
FP result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized; most recent FP result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO
*19. Figures are rounded down to the indicated digits (Percentages and multiples are rounded to one
decimal place.)38

SANKEI REAL ESTATE Inc.

Statement of Income from Rent Business by Property for the Fiscal Period Ended February 2023 (8th FP)(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Property nameTokyo
Sankei Building

Rent business revenue

59,133526,880

171,745

68,823

198,615

178,240

108,675

Rental revenue

51,545414,441

151,668

64,086

170,927

145,209

88,635

Common area
maintenance revenue

2,021

80,532--

13,232

13,790

5,937

Utilities reimbursement

4,174

22,890

6,707

4,366

11,433

12,648

11,078Parking revenue

825

8,031

2,732

324

1,662

5,052

2,790

Other rental revenue

566

983

10,637

47

1,360

1,540

235

Expenses related to rent
business

32,791

244,696

50,242

24,37997,78868,22240,022

Outsourcing expenses

5,842

67,186

11,794

5,565

16,09816,651

9,212

Utilities expenses

5,021

58,804

8,456

5,005

15,515

18,222

12,298Property taxes

12,58337,604

10,772

4,829

55,763

9,993

7,754

683

1,135

-

-

-

-

-

Repair expenses

2,618

12,130

156

574

3,554

3,548

1,400

Insurance premium

117

725

298

133

274

414

203

-

112

250

250

250

250

350

3,356

64,72718,068

7,623

6,005

17,209

8,606

2,568

2,270

447

396

327

1,933

197

26,342

282,183

121,50244,444

100,826

110,01768,65329,698346,910

139,570

52,068106,831

127,227

77,259Land rent

Trust fee
Depreciation
Other expenses related
to rent business
Operating income (loss)
from rent business
NOI

39

SANKEI REAL ESTATE Inc.

Statement of Income from Rent Business by Property for the Fiscal Period Ended February 2023 (8th FP)(Unit: thousand yen)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Total

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower*

Omori
Park Building

S-GATE AKASAKA*

Miyazakidai Garden
OfficeHitachi Kyusyu
Building*

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Rent business revenue

157,036

86,191

206,955

118,800

2,891,948

Rental revenue

121,979

71,487

206,955

118,800

2,323,174

Common area
maintenance revenue

10,037

3,587

-

-

129,138

Utilities reimbursement

19,602

8,259

-

-

130,668

Parking revenue

4,680

1,542

-

-

34,048--274,91755,03943,046

1,338,956

Other rental revenue
Expenses related to rent
business

737(Not
disclosed)*

74,335(Not
disclosed)

1,314
33,070(Not
disclosed)

Outsourcing expenses

13,964

6,317

1,200

1,200

231,216

Utilities expenses

28,301

10,379--214,149

Property taxes

16,202

6,234

26,304

15,544

300,889

-

-

-

-

1,818

Repair expenses

3,609

879

-

-

271,417

Insurance premium

385

182

477

435

5,603

Trust fee

350

350

250

250

3,752

26,77025,572

296,09337

44

14,014

Land rent

Depreciation
Other expenses related
to rent business
Operating income (loss)
from rent businessNOI

59,647

11,318

10,428205

8,205

28,554521

162,688

82,701

85,341

53,120187,500

151,91575,753

1,552,992

222,336

94,01995,77061,326

216,054

178,685

101,325

1,849,085* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant,relevant party, etc. or information from which confidential information can be derived.

40

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value (as of February 28, 2023)(Unit: million yen)
Property
number

Property nameAcquisition
price

End of the 8th FP
Book value (a)End of the 7th FP

End of the 8th FP(August 31, 2022) (b)(February 28, 2023) (c)Appraisal value

CR

Appraisal value

CR

Change from appraisal in theprevious fiscal period(c)－(b)Appraisal value

CR

Unrealized
gain/loss(c)－(a)Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

2,509

2,615

2,690

2.3%

2,620

2.3%

(70)

0.0pt

4

13,10012,995

18,225

3.6%

18,000

3.6%

(225)

0.0pt

5,004

6,698

6,653

7,720

3.2%

7,750

3.2%

30

0.0pt

1,096

A-4

S-GATE AKIHABARA

2,055

2,028

2,710

3.3%

2,710

3.3%

0

0.0pt

681

A-5

Hibiya Sankei Building

5,829

6,064

6,620

2.8%

6,620

2.8%

0

0.0pt

555

A-6

Hatchobori Sankei Building

4,959

5,003

5,520

4.1%

5,490

4.1%

(30)

0.0pt

486

A-7

Toyo Park Building

3,782

3,873

3,920

3.7%

3,920

3.7%

0

0.0pt

46

A-8

Shinagawa Seaside TS Tower(50% quasi co-ownership interest in sectional
ownership of the building, etc.)

20,94021,13019,8003.3%

19,450

3.3%

(350)

0.0pt

(1,680)A-9

Omori Park Building

5,400

5,452

5,490

3.7%

5,490

3.7%

0

0.0pt

37

A-10

S-GATE AKASAKA(80% quasi co-ownership interest in sectional
ownership of the building, etc.)

5,600

5,631

5,992

3.1%

5,992

3.1%

0

0.0pt

360

A-11

Miyazakidai Garden Office

2,800

2,843

2,790

4.5%

2,730

4.5%

(60)

0.0pt

(113)

A-12

Hitachi Kyusyu Building

10,00010,197

10,300

4.3%

10,300

4.3%

0

0.0pt

102

83,674

84,48991,777

A-1

A-2

A-3

Office buildings subtotal (total of 12 properties)-

91,072

-

(705)

-

6,582

B-1

Hotel Intergate Tokyo Kyobashi

8,961

8,897

9,040

3.8%

9,040

3.8%

0

0.0pt

142

B-2

Hotel Intergate Hiroshima

3,990

3,872

4,120

4.6%

4,120

4.6%

0

0.0pt

247

Sub assets subtotal (total of 2 properties)

12,951

12,77013,160-13,160

-

0

-

389

Portfolio total (total of 14 properties)

96,62597,259104,937-

104,232

-

(705)

-

6,972

* CR is a cap rate based on direct capitalization method (NCF basis).

41

SANKEI REAL ESTATE Inc.

Change in NAV per Unit (after Deduction of Distribution)(Unit: yen)

123,491

121,641

122,507

19,227

20,114

123,268

122,093

17,433

16,257

14,927

105,835

105,836

105,836

End of February2022(6th FP)End of August2022(7th FP)End of February2023(8th FP)

120,762

120,000

114,157
21,078108,184

110,000

11,744
11,670Capitalincreasethroughpublicoffering

Unrealized
gain

100,000

Capitalincreasethroughpublicoffering

90,000102,413

102,413

102,413102,393

End of February
2020(2nd FP)End of August
2020(3rd FP)End of February
2021(4th FP)End of August2021(5th FP)

96,515～～

Net assets

80,000End of August
2019(1st FP)42SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of March 31, 2023)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

A-8

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

Office buildings
S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Shinagawa Seaside
TS Tower(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Shinagawa-ku, Tokyo

Acquisition dateMar. 12, 2019(1) Mar. 12, 2019(2) Sep. 3, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019(1) Sep. 3, 2019(2) Sep. 2, 2021

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

20,940 million yen

Appraisal value

2,620 million yen

18,000 million yen

7,750 million yen

2,710 million yen

6,620 million yen

5,490 million yen

3,920 million yen

19,450 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

2.6%

5.4%

3.8%

4.4%

3.5%

5.1%

4.0%

3.5%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Jul. 2003

Occupancy rate

99.5%

90.4%

100.0%

100.0%

100.0%

100.0%

92.3%

76.0%

PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

3.2%

Location(50% quasi co-ownershipinterest in sectional
ownership of the building,
etc.)

43

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of March 31, 2023)
Property number

A-9

A-10

A-11

A-12

B-1

B-2

B-3

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Sub assets

Property name

Omori
Park Building

S-GATEAKASAKA

Miyazakidai
Garden OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

SANKEILOGI Settsu

Location

Ota-ku, Tokyo

Minato-ku, Tokyo

Miyamae-ku,
Kawasaki-shi

Sawara-ku,
Fukuoka-shi

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Settsu-shi, Osaka

Acquisition date

Sep. 3, 2019(1) Oct. 1, 2020
(2) Sep. 2, 2021
(3) Mar. 31, 2023

Sep. 2, 2021

Sep. 2, 2021

Mar. 12, 2019

Sep. 3, 2019

Mar. 31, 2023

Acquisition price5,400 million yen

7,000 million yen

2,800 million yen

10,000 million yen

8,961 million yen

3,990 million yen

5,242 million yen

Appraisal value

5,490 million yen

7,490 million yen

2,730 million yen

10,300 million yen

9,040 million yen

4,120 million yen

5,440 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

4.0%

3.4%

4.5%

4.8%

3.9%

5.0%

4.0%

Construction completion

May 1993

Jul. 2015

Feb. 1993

Feb. 1996

Jan. 2018

Oct. 2018

Oct. 2022

Occupancy rate

79.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

5.6%

4.6%

9.5%

2.5%

1.8%

2.1%

6.9%

PML value (average)

1.7%

44

SANKEI REAL ESTATE Inc.

Portfolio Matrix (1) (as of March 31, 2023)<Cap. Rate (Appraisal NOI Yield) x Area>

Area(Unit: million yen)
Area

Appraisal
NOI
CAP
Less than
3.0%
Less than
3.5%

Central 3 wards of Tokyo

Tokyo 23 wards

Greater Tokyo

Osaka City

Other ordinance-designated cities

Total acquisition
price(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)(Excluding Tokyo)

Nagoya City

Core Cities, Major Regional Cities(Overall ratio)

Property name
Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Acquisition price

2,509

22 years old,
1-minute walk

(2.4%)

2,509

S-GATE AKASAKA
7 years old,
1-minute walk
30 years old,
1-minute walkCap. Rate

Property nameAcquisition priceTokyo Sankei Building

7,000
7,000

Hibiya Sankei Building

Less than
4.0%

Building age, walking
time from station

5,829(6.8%)

Shinagawa Seaside TS Tower
19 years old,
1-minute walk

SANKEILOGI SettsuNew,
6-minute walk

20,9405,242

S-GATE NIHONBASHIHONCHO

47,671

4 years old,
4-minute walk

(46.2%)

6,698

Hotel Intergate Tokyo
Kyobashi
5 years old,
1-minute walkLess than
4.5%

8,961

S-GATE AKIHABARA

Omori Park Building

5 years old,
5-minute walk29 years old,
3-minute walk

2,055

5,400

11,237

Toyo Park Building
31 years old,
9-minute walk(10.9%)
3,782

Miyazakidai Garden OfficeLess than
5.0%

30 years old,
3-minute walk

Hatchobori Sankei Building

5.0%
or moreTotal acquisition
price

57 years old,
3-minute walk
38,013(Overall ratio)(36.8%)

2,800

BREEZÉ TOWER
30,1222,800

14 years old,
3-minute walk
13,100(29.2%)(2.7%)(12.7%)

4,959

13,100

Hitachi Kyusyu building

12,80026 years old,
17-minute walk

10,000(12.4%)

Hotel Intergate Hiroshima

22,0494 years old,
3-minute walk
19,232(18.6%)

3,990(21.4%)
103,267(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

45

SANKEI REAL ESTATE Inc.

Portfolio Matrix (2) (as of March 31, 2023)<Typical Floorplate x Area>
Area(Unit: million yen)
Area

Typicalfloorplate(tsubo)Typical floorplate (tsubo)

400 tsubos
or moreLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreCentral 3 wards of Tokyo

Tokyo 23 wards

Greater Tokyo

Osaka City

Other ordinance-designated cities

Total acquisition
price(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)(Excluding Tokyo)

Nagoya City

Core Cities, Major Regional Cities(Overall ratio)

Property name
Building age, walking
time from station

Property nameAcquisition priceTokyo Sankei Building
22 years old,
1-minute walk

2,509

Building age, walking
time from station

Property nameAcquisition price

19 years old,
1 -minute walk

4,959

Building age, walking
time from station

BREEZÉ TOWER

Miyazakidai Garden Office

5,400

30 years old,
3-minute walk

2,800

Toyo Park Building
31 years old,
9-minute walk

Property nameAcquisition price

14 years old,
3-minute walk

20,940Omori Park Building

57 years old,
3-minute walk

Property nameAcquisition priceShinagawa Seaside TS Tower

29 years old,
3-minute walk

Hatchobori Sankei Building

Building age, walking
time from station

Building age, walking
time from station

Acquisition price

SANKEILOGI Settsu
13,100New,
6-minute walk

41,791
5,242

Hitachi Kyusyu building

18,20026 years old,
17-minute walk

(17.6%)

10,000Hotel Intergate Hiroshima
4 years old,
3-minute walk

3,782

(40.5%)

3,990

12,732(12.3%)S-GATE NIHONBASHIHONCHO
4 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more30 years old,
1-minute walk

5,829

28,489S-GATE AKASAKA
7 years old,
1-minute walk

(27.6%)
7,000

Hotel Intergate Tokyo
Kyobashi
5 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA

2,055

5 years old,
5-minute walk

(2.0%)

2,055

Total acquisition
price38,01330,1222,800

13,10019,232103,267(Overall ratio)(36.8%)(29.2%)(2.7%)(12.7%)(18.6%)(100.0%)

Typical Floor Plate * Office Buildings Only (Construction area is used as reference value for sub assets)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

46

SANKEI REAL ESTATE Inc.

Portfolio Status (as of March 31, 2023)
SANKEI REAL ESTATE’s high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close

New

Percentage by Walking Time to the Nearest Station

Percentage by Building Age(excluding logistics facilities)
More than
5 minutes
14.1%
More than
3 minutes,
but within
5 minutes
8.9%

3.8
minutesMore than
20 years,
but within
30 years
17.3%

Within
1 minute
46.2%

77%

86%

Within 55分以内
minute
40%

23.0%

18.6
years

2.4%

Average

400 tsubos
or more317.7
tsubos

200 tsubos
or more,but less than
300 tsubos

43.0%

300 tsubos or more,
but less than 400 tsubos

60%

80%

100%

21.4%

33%

Within10年以内
10 yearsWithin20年以内
20 years46%

20%

Within
10 years
32.9%

More than 10 years,
but within 20 years
33.0%

Within 33分以内
minutes0%

Average

100 tsubos
or more,but less than
200 tsubos

10.3%

More than 1 minute,but within 3 minutes
30.9%

Within 11分以内
minutes

Percentage by Typical Floorplate (Office Buildings)

Less than
100 tsubos

More than
30 years
16.8%

Average

Large

Large-scale buildings*

66%
83%

Within30年以内
30 years
0%

20%

40%

60%

80%

100%

75%

Large buildings

98%
0%

20%

40%

60%

80% 100%* Calculated based on the definition of “Large-scale buildings: 200 tsubos or more” and “Large buildings: 100 tsubos or more, but less than 200 tsubos” made by Sanko Estate Co., Ltd.

47

SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of February 28, 2023; based on leased area after considering ownership interest)
Percentage by Lease Period

Percentage by Lease Period

Percentage by Contract Form

(excluding hotels)(including hotels)

10 years or more
Fixed-term building
lease agreement

Less than 3 years

24.9%

47.6%

52.4%

10 years or more

Average*1

6.4 years

4.0 years 48.7%

41.1%

Others 3.8%

Precision devices 1.8%

Construction & real estate
4.8%

Food
 NH Foods, etc.

IT
5.8%

51.2%

 GRANVISTA Hotels & Resorts(100% subsidiary of sponsor)

Others 1.3%

9.0%

Pharmaceuticals
 Bayer Yakuhin, etc. 9.4%

Manufacturing
15.7%

5 years or more, butless than 10 years(Manufacturing)

Machinery 2.2%
Materials 2.3%

12.4%

16.6%

Percentage by Business Type

Wholesale & retail 3.4%Hotel

5 years or more, butless than 10 years

3 years or more, butless than 5 years

Percentage by Business Type

Service Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities, etc.

29.5%

Average*1

3 years or more, butless than 5 years

Transportation & communications 2.8%

Less than 3 years

20.0%

14.0%

Ordinary building
lease agreement

5.1%

74.1%

General electrical appliance manufacturers
and electronics manufacturers
 Hitachi
 Sony Group, etc.

48

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of February 28, 2023)

Business type

Total leased
area
(m²)

% of
portfolio’s
total leased
area

Manufacturing(general electricalappliances)

26,513.3

27.85%

Hitachi Kyusyu Building

Hotels15,166.7

15.93%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Sony Group Corporation

Manufacturing(general electricalappliances)Not
disclosed

Not
disclosed

Shinagawa Seaside TS Tower

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

NH Foods Ltd.

Manufacturing(food)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

2.67%

S-GATE NIHONBASHI-HONCHO

Hakuhodo DY Holdings Inc.

Services(advertising)

2,517.7

2.64%

S-GATE AKASAKA

Services(equipment maintenance)

1,509.7

1.59%

Omori Park Building

IT

1,476.0

1.55%

Shinagawa Seaside TS Tower

Services(equipment maintenance)Not
disclosed

Not
disclosed

BREEZÉ TOWER

Name of end tenant

Hitachi, Ltd.
GRANVISTA Hotels & Resorts Co., Ltd.

Toyo Sangyo Co., Ltd.
HBA Corporation
Yokogawa Solution Service Corporation

Property name

*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party,
etc. or information from which confidential information can be derived.
*2 An agreement was reached with Sony Group Corporation for the termination of contracts for Shinagawa Seaside TS Tower on March 31, 2023 (14 floors).
*3 “Total leased area” is rounded to one decimal place.

49

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of February 28, 2023)
 Breakdown of Investment Units by Unitholder Type100%

Financial institutions
Other Japanese corporations
Individuals/Other

80%

Securities companies
Non-Japanese corporations, etc.

14.24%

15.62%

6.25%
1.24%

5.96%
2.57%

16.07%
24.48%

25.63%

11.10%

10.65%

6.87%

7.12%

4.38%

5.39%

18.23%

70%

Number ofunits owned(units)Share of units
owned
(%)

Custody Bank of Japan, Ltd. (Trust Account)

108,798

23.29%The Master Trust Bank of Japan, Ltd. (Trust Account)

64,63813.83%The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

20,722

4.43%

The Sankei Building Co., Ltd.

17,4793.74%

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

8,894

1.90%

JP MORGAN CHASE BANK 385771

6,316

1.35%

The Bank of Yokohama, Ltd.

6,107

1.30%

JAPAN SECURITIES FINANCE CO., LTD.

4,772

1.02%

SMBC Nikko Securities Inc.

4,345

0.93%

UEDA YAGI TANSHI Co., Ltd.

3,663

0.78%

245,73452.60%Name of unitholder

13.22%

13.93%

90%

 Major Unitholders

5.94%
2.00%

60%
50%
40%
64.31%

30%

62.61%

57.74%

53.15%

51.20%

20%
10%0%
End of 4th FP

End of 5th FP

End of 6th FP

End of 7th FP

End of 8th FP

 Number of Unitholders by Unitholder TypeEnd of
4th FP

End of
5th FP

End of
6th FP

End of
7th FP

End of
8th FP

Financial institutions

49

43

50

50

47

Securities companies

22

22

23

23

22

135

124

178

240

248

70

75

143

160

171

Individuals/Other

7,406

7,064

10,117

13,872

13,981

Total

7,682

7,328

10,511

14,345

14,469Other Japanese
corporations
Non-Japanese
corporations, etc.

Total
* Each share above is rounded down to two decimal place.

50

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

CapitalShareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO

Internal Audit OfficeCompliance OfficeSustainability Promotion Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets undermanagement
・Operation and management ofassets under management

Finance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

51

SANKEI REAL ESTATE Inc.

Notes
Unless otherwise specified, the figures in this document are rounded down to the nearest unit and percentages are rounded to one decimal place. Therefore, the value, such as sum total, may not match the value obtained thereby.
Page 3
1. “TCFD” refers to the “Task Force on Climate-Related Financial Disclosures” established by the Financial Stability Board at the request of the G20 to consider how to perform climate-related disclosure and responses by financial
institutions.
2. Sankei Building Asset Management has concluded a sponsor support agreement with the sponsor (Sankei Building) for receiving support providing sale information on properties and various other types of support.
Page 6
1. Shinagawa Seaside TS Tower holds 50% quasi co-ownership interest in sectional ownership of the building, etc.
Page 19
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “Cap Rate” refers to “appraisal NOI yield,” which is the ratio of the net operating income derived by the direct capitalization method shown on the real estate appraisal report against the acquisition price. The same applies below.
3. “Acquisition price” is shown as the transaction price of real estate and trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets. The sale and purchase prices do not include consumption
tax, local consumption tax and the various expenses required for the acquisition. The same applies below.
4. “Greater Tokyo” refers to the Tokyo, Kanagawa Prefecture, Saitama Prefecture and Chiba Prefecture. The same applies below.
5. “Core cities” refers to cities with a population of 200,000 or more (excluding Greater Tokyo, Osaka City and Nagoya City, and other cities designated by government ordinance).
6. “Major regional cities” refers to cities that are municipalities with population of less than 200,000 and the Asset Management Company has deemed certain demand can be found for specific asset types.
7. “Typical floor plate” is a typical floor plan in mid- to high-rise buildings. The same applies below.
8. Corresponds to 2% co-ownership interest in Tokyo Sankei Building, 45% quasi co-ownership interest in sectional ownership of the building, etc. of the office portion of BREEZÉ TOWER, 51% co-ownership interest in S-GATENIHONBASHI-HONCHO and 50% quasi co-ownership interest in sectional ownership of the building, etc. of Shinagawa Seaside TS Tower.
9. “Actual NOI yield” refers to the actual NOI yield of all assets held at each point in time calculated using the following formula for assets after acquisition. The same applies below.
Actual NOI yield = Actual NOI (annualized)(*) ÷ acquisition price(*) Actual NOI states the level of normal operation(*). For example, as some fixed asset taxes on acquired assets have not been expensed in the fiscal period ended August 2019, the fiscal period ended February 2020, the fiscal
period ended February 2021, and the fiscal period ended February 2022, these are the figures after adjustment assuming these are expensed. For the fiscal period ended August 2022, it is the figure calculated by subtracting
other temporarily occurring revenue.
(*) “During normal operation” (also referred to as “the level of normal operation”) refers to the level at the time of stable operations rather than the temporary level immediately after commencement of operations by SANKEIREAL ESTATE. The same applies below.
10．“Investment ratio by geographic area” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE by geographic area.
11. “Investment ratio by asset” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE into office buildings and those other than office buildings.
Page 20
1. The properties shown on the “Pipeline from Sponsor” page are those developed or scheduled to be developed by Sankei Building, special purpose companies or specified purpose companies in which Sankei Building invests throughsilent partnership, preferred equity investment or other means, and affiliates of Sankei Building.
2. The development plans shown on the “Pipeline from Sponsor” page are those of SANKEI REAL ESTATE and their execution is neither guaranteed nor promised.
Page 21■ (Top left graph) Change in Occupancy Rate
1. “Occupancy rate” indicates the percentage of the total leased area (*2) against the total leasable area (*1) of each of the acquired assets as of each base date, rounded to one decimal place.
(*1) “Total leasable area” is the total area believed to be leasable (not including area for storage facilities, billboards, parking areas, etc. that are not the main use) based on lease agreements or building drawings, etc. pertaining toeach of the acquired assets as of each date shown.
(*2) “Total leased area” is the total leased area (not including area for storage facilities, billboards, parking areas, etc. that are not main use) shown in lease agreements for the building pertaining to each of the acquired assets as ofeach date shown (excluding, however, lease agreements for which the lease period has not commenced). For the portion covered by a pass-through master lease, this is the total of the area for which a lease agreement has
actually been concluded with an end tenant for said portion, and the lease period has commenced.
■ (Top right graph) Change in Rent Gap for Office Buildings
1. “Rent Gap” refers to the figure arrived at when the amount of difference between the average rent for SANKEI REAL ESTATE’s office building portfolio (*1) and the market rent (*2) is divided by the market rent. SANKEI REAL ESTATE
believes there is room for negotiation with tenants to increase rent when revising rent if the figure is negative. This applies to the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period that are categorized as“Office Buildings.”(*1) “Average rent of the office building portfolio” is calculated using the weighted average, based on leased area, of the total amount of monthly rent specified in lease agreements concluded as of the end of each period, for theoffice building portfolio* (including CAM). Furthermore, it does not take into consideration free rent and rent holidays as of the same day and is based on the rent as of the end of each period, if there is an agreement to change
rent in the future. Furthermore, if agreements with tenants include variable rent, calculation is made without taking into consideration variable rent. (Consumption tax, etc. is not included.)(*2) “Market rent” is calculated using the weighted average, based on leased area, of the total median value of assumed new contract rent (typical floor plate) (including CAM) as of March 2023 for office buildings subject to rent gap
calculation within the acquired assets of SANKEI REAL ESTATE shown in the market report prepared by CBRE.
Market rent is assessed by CBRE using its own methodology assuming the conclusion of new contracts with new tenants as of March 2023 based on information collected by CBRE and the objectivity of the assessment, and thevalidity and accuracy of the assessment content are not guaranteed. In particular, actual new contract rent fluctuates due to factors such as whether it is for a new tenant or rent revision with an existing tenant, the timing of therent revision, the timing of moving in, the contract area and the region, and for this reason the rent in the CBRE-assessed rent may not be realized. Furthermore, the amount and level of actual new contract rent for the officebuilding portfolio are not guaranteed, and there are no assurances or promises that the rent increases equivalent to the “rent gap” will be made.

52

SANKEI REAL ESTATE Inc.

Notes
■
1.

(Bottom figure) Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
Office Buildings Average Rent Unit Price is calculated using “Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate.”

Page 22■ (Top graph) Rent Revision Performance of Office Buildings (Based on Rental Area)
1. Of the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period, applies to properties classified under “Office Buildings” (12 properties in the fiscal period ended February 2023: Tokyo Sankei Building (2% coownership interest), BREEZÉ TOWER (45% quasi co-ownership interest in sectional ownership of the office portion of the building), S-GATE NIHONBASHI-HONCHO (51% co-ownership interest), S-GATE AKIHABARA, Hibiya Sankei
Building, Hatchobori Sankei Building, Toyo Park Building, Shinagawa Seaside TS Tower (50% quasi co-ownership interest in sectional ownership of the building, etc.), Omori Park Building, S-GATE AKASAKA (80% quasi co-ownershipinterest), Miyazakidai Garden Office, and Hitachi Kyusyu Building). For example, for the fiscal period ended February 2023, in the 12 applicable properties, those with rent revision under lease agreements occurring in the period
from September 1, 2022, until February 28, 2023 (limited to those for which a lease agreement was concluded or renewed during the relevant period), applied to 24 tenants with a total of 2,600 tsubos in area (rounded to thenearest unit). Assuming the revised area is 100%, on a leased area basis, monthly rent was increased in 0.1%, renewed at the same level (maintained) in 96.2%, and reduced in 3.7%. Changes in floor space were treated as rent
revision performance, and if there was no change in the current rent per unit, it is regarded as being maintained.
2. “Rate of increase” refers to the figure calculated by dividing the difference between the total monthly rent after renewal and the total monthly rent before renewal by the total monthly rent before renewal for lease agreements
renewed during each period (for example, from September 1, 2022, to the end of February 2023 for the period ended February 2023), with increased rent (calculated for renewal with rent revision/renewal of agreements withexisting tenants, limited to lease agreements concluded or renewed during the relevant period).
Page 24■ (Top graph) Scheduled Renewal with Rent Revision/Renewal and Progress (Targeting Office Buildings)
1. Applies to lease agreements concluded as of the end of the fiscal period ended February 2023 (8th FP), stating the area subject to renewal with rent revision/renewal in the fiscal period ending August 2023 (9th FP) and the fiscal
period ending February 2024 (10th FP).
2. The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
3. “Ratio to total leased area” is the value calculated by dividing the total contract revision/renewal (planned) area for each contract revision/ renewal period by the total leased area for each period.
4. “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as of March 31, 2023, and whose revision/renewal has been completed by the contract revision/renewal(planned) area for each contract revision/renewal period.
Page 27■ (Top left figure) Financing Highlights
1. “Balance of interest-bearing liabilities” shows the figure as the date of disclosure.
2. “Ratio of long-term debt” is the ratio of the balance of the long-term interest-bearing debt (not including the current portion) included in the balance of interest-bearing liabilities as the date of disclosure.
3. “Average financing interest rate” is calculated using the weighted average, based the balance of interest-bearing debt, of the anticipated applicable interest rate of each interest-bearing liability as the date of disclosure. Calculations
are on an interest payable basis and do not include arrangement fee and other borrowing-related expenses.
4. “LTV” is the balance of interest-bearing liabilities divided by the amount of total assets and multiplied by 100, rounded to one decimal place. The figures at the end of the 9th FP and the end of the 10th FP at the top right are
forecasts.
5. “Ratio of fixed interest rate” refers to the ratio of the balance of interest-bearing liabilities with fixed interest included in the balance of interest-bearing liabilities as the date of disclosure.
6. “Average remaining time to maturity” refers to the period determined by the weighted average, based on the balance of each interest-bearing liability, of the period until the repayment date or redemption date of each interestbearing liability as the date of disclosure.
■ (Bottom left figure) Distribution Map of Average Financing Interest Rates and Average Remaining Time to Maturity of Office J-REITs
1. “J-REIT” refers to a listed real estate investment corporation, and “Office J-REITs” refers to J-REITs with an office building rate (*) exceeding 50% in their portfolio at the end of the most recent fiscal period as of March 31, 2023.
(*) “Office building rate” is the percentage (on acquisition price basis) of “office buildings” included in an investment corporation’s entire portfolio. The same applies below.
2. Uses the figures for the most recent fiscal period of “Office J-REITs” as of March 31, 2023.
3. The dotted lines in the graphs are straight lines approximating the relationships between “average financing interest rate” and “average remaining time to maturity” for Office J-REITs that are statistically calculated to minimize thesum of the error (distance between the anticipated line and the coordinates of the distribution) using the least-squares method

Page 28■
1.

(Bottom figure) Maturity ladder“Maturity ladder” refers to a diagram that aggregates the amounts of each interest-bearing liability for a certain period by maturity date and lists these in order of time.

Page 31
1. “BELS”, the Building-Housing Energy-efficiency Labeling System, is a third-party evaluation system that evaluates energy-saving performance of buildings based on evaluation standards set by the Ministry of Land, Infrastructure,
Transport and Tourism. The same applies below.
2. “DBJ Green Building Certification” is a certification system established by Development Bank of Japan Inc. (DBJ) in April 2011 to support properties that give proper care to the environment and society (Green Building). Besides theapplicable properties’ environmental performance, based on comprehensive evaluation, including various efforts for stakeholders, such as consideration to disaster prevention or local communities, it evaluates and certifies realestate needed for society and economy and supports those initiatives.
3. CASBEE for Real Estate was developed to utilize the results of the CASBEE* environmental assessment of buildings in real estate evaluations. Buildings are assessed in five categories — Energy/GHG, Water, Materials,
Biodiversity/Sustainable Site, and Indoor Environment — and each is assigned one of four ranks — S, A, B+, or B.
(*) CASBEE, or Comprehensive Assessment System for Built Environment Efficiency, is a system that comprehensively evaluates the quality of buildings that are environmentally friendly by introducing materials that are effective forenergy saving and have low environmental burden as well as the comfortableness of indoor areas and appearances of buildings. In April 2001, with the support from the Housing Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism, the Comprehensive Environmental Assessment Research Committee for buildings was established as part of joint projects of government, industry and academia. Since then, it has implemented
developmental and maintenance activities in a continuous manner.

53

SANKEI REAL ESTATE Inc.

Notes
Page 32■ Environment
1. “GRESB” is the name of an annual benchmark assessment measuring consideration for the environment, society and governance (ESG) in real estate companies and funds, and the organization that manages this. It was founded in2009 by a group of major European pension funds leading the Principles for Responsible Investment (PRI). There are currently 140 investor members utilizing GRESB data in the selection of investment targets and dialogue withinvestment targets, and several institutions in Japan, including the Government Pension Investment Fund (GPIF) use GRESB assessment results.
2. “DBJ Green Building Certification” was obtained by The Sankei Building Co., Ltd. for Tokyo Sankei Building and BREEZÉ TOWER
Page 42
1. The actual values of NAV per unit in each period are calculated as follows.
Actual value of NAV per unit = Net assets per unit (*1) at end of each FP + Unrealized gain (loss) at end of each FP (*2) / Number of investment units issued and outstanding at end of each FP (*3)(*1) “Net assets per unit” is obtained using the following formula. This is simply shown as “Net assets” in the graph. The same applies below.
Net assets per unit = Net assets at end of FP (after deducting distributions at the end of each FP) ÷ Number of investment units issued and outstanding at end of FP(*2) “Unrealized gain/loss at end of FP” is obtained using the following equation. It is referred to as “unrealized gain” if the result is positive and “unrealized loss” if negative. This is simply shown as “Unrealized gain” or“Unrealized loss” in the graph.
Unrealized gain/loss at end of FP = Total appraisal value of assets held by SANKEI REAL ESTATE at end of FP - Total book value of assets held by SANKEI REAL ESTATE at end of FP(*3) “Number of investment units issued and outstanding at end of each FP” is the number of investment units issued and outstanding at the end of each fiscal period.
2. The figures shown on this page are rounded to the nearest unit and percentages are rounded to one decimal place.
Pages 43 and 44
1. Entries with multiple “acquisition dates” indicate additional acquisitions of interest.
2. “PML value” refers to the probable maximum loss ratio in earthquake risk analysis, which is represented by the percentage of the probable maximum loss in relation to the replacement cost (value in the event of reconstructing thebuilding) in the event of the largest anticipated earthquake during the period of use of the building (PML = probable maximum loss / replacement cost x 100).
3. Stated figures of assets held except for A-10 and B-3 are as of the end of the 8th FP, and the figures of A-10 and B-3 are those published at the time of the acquisition.
Page 47
1. “Sponsor support rate” is the percentage (on an acquisition price basis) of sponsor-owned properties or those acquired by using sales information on properties owned by third parties provided based on a sponsor support
agreement. The same applies below.
2. “Percentage by Walking Time to the Nearest Station(except for logistics facilities)” is the percentage, based on acquisition price, of assets held excluding logistics facilities after classifying them by the number of minutes required towalk from the nearest station assuming that it takes one minute to travel a road distance of 80 meters, and the average is the weighted average based on acquisition price of each property of the calculated figures, rounded to one
decimal place.
3. “Percentage by Building Age” is the percentage, based on acquisition price, of assets held after classifying them by building age as of March 31, 2023, and the average is the weighted average, based on acquisition price of each
property, of the calculated figures, rounded to one decimal place.
4. “Percentage by Typical Floor Plate (Office Buildings)” is the percentage, based on acquisition price, of assets held of which use is office buildings after classifying them by typical floor plate, and the average is the weighted average,
based on acquisition price of each property, of the calculated figures, rounded to one decimal place
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1. “Percentage by Contract Form” is the percentage of assets held based on leased area, rounded to one decimal place.
2. “Percentage by Lease Period” is the percentage of assets held classified into “including hotels” and “excluding hotels,” based on leased area, rounded to one decimal place. The average is the weighted average based on leased areaof each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Business Type” is the percentage of assets held classified by tenant business type based on leased area, rounded to one decimal place.
4. “Percentage by Business Type (Manufacturing)” is the percentage of assets held classified by tenant business type within manufacturing based on leased area, rounded to one decimal place.
5. The leased area for properties leased through a master lessee is calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants
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1. “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
2. “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
3. “Total leased area” and “% of portfolio’s total leased area” for properties leased through a master lessee are calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end
tenants

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